ACES Impedes Alaska's Competitiveness, Jeopardizes Future

OP-ED by Jeff Kinneeveauk

Published: March 14, 2012

Alaska continues to face a critical challenge because of our state’s oil production tax structure.Alaska’s Clear and Equitable Share (ACES) is impeding our competitiveness and putting our
future in jeopardy. Our economic bedrock is at stake because our oil and gas industry is being
severely crippled.

Our current tax structure greatly concerns me as the head of the largest Alaska-owned employer
in the state. ASRC Energy Services (AES) is a subsidiary of Arctic Slope Regional Corporation,
and we employ thousands of Alaskans, many of whom are in their early and mid-20s and many
of whom are Alaska Native. These young people are the future leaders of our companies and our
state. They want to know that their company, one that is a service provider to the oil and gas
industry, is going to remain in business.

Lately, other states that welcome the oil industry are thriving while Alaska is failing to keep up.
The professional jobs such as petroleum and drilling engineers, geologists, geophysicists, air
permitters, field biologists, architects, cultural resource specialists, project managers, as well as
high paying construction jobs for managers, builders, logistics managers, supply chain
personnel, etc., and many businesses supporting the industry are headed south to more welcome
climes. Our current tax system, that only took a few weeks to implement and seems next to
impossible to change, is complex and uninviting to investment.

With oil prices more than $120 a barrel, and rising, Alaska has an opportunity, and an obligation,
to position ourselves now and also for a prosperous future—a future that ensures both young and
old are set with a viable pipeline and revenue from an industry that is sustainable. In order to
accomplish this, our state government and our legislators need to put their heads together and
meaningfully change and improve the tax structure this session to welcome growth.

As an Alaska-born Inupiaq, I resolve to give our youth a strong future. Together we must make
our voices heard and get the message to our legislators who are making decisions on our behalf.
Standing by and watching the pipeline, which employs thousands of Alaskans and supports
countless businesses, continue to lag is unacceptable. Together, let’s send a clear message to
Juneau—change ACES today. Taikuu Sunna

Jeff Kinneeveauk is the President/CEO of ASRC Energy Services (AES). AES is the largest
Alaska-based oil and gas service company in the state, and is a wholly-owned subsidiary of the
Arctic Slope Regional Corporation.